Ask Emily: Should I Poach My Neighbor’s Nanny?

By WSJ Staff

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Emily,

My wife is thinking about returning to work this fall. When she goes to our neighborhood park with our kids, she runs into a lot of nannies, and she has met one who seems really special to us. We have started hiring her as a weekend babysitter, and our kids like her a lot and now ask about her all the time. My question is whether it’s OK to try to hire her away even though she is currently a nanny for another child in our neighborhood. I think we would be able to offer her a large pay increase, and I think she’d prefer to work for us. We mentioned this to a close friend and she was appalled that we would even consider doing this. What do you think?

–Joe

Joe,

I see where your friend was coming from, as your letter strikes fear into the heart of all moms (like me) who are terrified that their nanny will leave them. However: I also see your point about fairness. In other fields it is common for companies to hire talent away from their competitors; this is how the good employees are rewarded. There is no reason that the market for nannies should be any different.

There are, however, two issues rooted in economics that I think should give you pause. First, I’m not so sure that you’ll manage to get her. You say that you can offer a pay increase, but I’m guessing the other family will increase too under the threat of her departure. And it may well be the case that the other family is willing to pay more.

This last point is related to the idea of “firm-specific human capital”: over time, as employees work at a particular company, they gain some general skills in their field, but they also gain some skills which are only valuable to their current employer. The family firm is no different. Having worked for this other family already, the nanny may well be more valuable to them than to you, meaning your offer would only increase her wage and not result in her working for you.

Second — as is my normal advice — I’d urge you to think “on the margin” about the benefits and costs. The cost of nanny poaching is social stigma. The benefit is the quality of this nanny over your next best option. That is likely to be a lot smaller than, say, the total benefit you gain from having someone good take care of your kids. Thinking about it like this may having you thinking it’s not, in fact, worth it.

–Emily

Dear Emily,

I have an opportunity to work in Chicago with a firm in nearly the perfect job, but I don’t like Chicago. Alternatively, I could go back to L.A., which I love, and start my career down a slightly less ideal path. How would you go about making this decision, and do you have any advice?

–David

David,

There is a fair amount of research in economics which demonstrates that where you start in your career matters many years later. People who leave school in a bad economy — and, therefore, start in a worse job on average — are making less money even five or ten years later, once the economy improves. This suggests that there may be big long-term differences in your ultimate career success which arise from starting at a perfect job versus one which is slightly less.

Of course, liking where you live also matters (although what is wrong with Chicago?!) I think the key, however, is that the location choice you make now does not have the same long-term consequences as the job choice.

This favors the Chicago option. Take the good job in Chicago, get all the benefits associated with starting on a good track. In a few years, when you just can’t take the winter anymore, look to move back to LA. Over the course of a long career and life, you’ll barely feel those few years of cold, and you will have set yourself up for a much nicer life once you’re out in the sunshine.

–Emily

Hi Emily,

I wanted to follow up on your nightclub question. I see what you are saying that men like having women around, but I live in NYC and even though there are more single women, clubs continue to charge men more. Why is that?

–Mr. Curious

Mr. Curious,

An intriguing puzzle. I’d predict that the price difference in NYC is less than in some place (say, Alaska) where men outnumber women. The ratio of women to men in NYC may just not be high enough yet to equalize the prices, given that I stand by my last answer that men care a lot about having women around. Of course, to prove this you’d need data. Sounds like a good project for a graduate student.

–Emily

Ms. Oster is an economics professor at the University of Chicago Booth School of Business. Have a question for Emily? Email AskEmily@wsj.com. Follow her on Twitter at @ProfEmilyOster. Facebook: fb.me/profemilyoster

Comments (3 of 3)

I think it's just fine to hire a nanny away. Who's to say that she isn't looking for a job she likes more with better pay? It's her JOB, not her life.

10:39 am September 6, 2013

Anonymous wrote :

Another thought re: Nanny-poaching: What would you expect your new child care professional to say to her former charge, when the poor child sees her frolicking with some other kids on the playground? That seems pretty cruel.

2:05 pm August 12, 2013

@David wrote :

"Lifestyle" is not an objective, just the result of choices about important matters such as work and family.